A lot of people think Gareth Cliff is an idiot. I’m not talking about his usual detractors – mother grundies and religious nuts. I’m talking about many of his two million fans, the listeners of the breakfast show he used to host on 5FM. Why on earth would he leave such a job to start an internet radio station?
Their argument makes sense, at least at face value. Why would anyone move from listening to FM radio – a medium so easy, cheap and ubiquitous that even the poorest of the poor can access it – to listening to radio over the internet? Who wants to use their precious data bundles to listen to the radio?
But I think Cliff and his colleagues have simply seen an opportunity – a rare inflection point in history when people’s habits and ideas are ready and able to be shifted. They are not the only ones to have seen this opportunity. Around the world, entrepreneurs are grabbing hold of the mobile computing revolution with both hands.
Any successful market disruption relies on three key ingredients. First, the would-be disrupters must understand the market they wish to disrupt. Cliff and his partners have spent more than a decade at the top of the FM radio heap. They understand not only how to build and retain an audience, but also the technical and organisational excellence required to do so.
They also understand just how mediocre the South African radio market is. Hemmed in by bureaucracy, conservatism and inertia, most local stations push a watery mix of pop music, inane chatter and generic news. The airways are cluttered with annoying adverts, live reads, plugs for events and sponsorships.
Ingredients for disruption
The second ingredient for disruption is an understanding of what needs to change. Cliff and company have launched a show almost entirely free of clutter and banality. If a guest is particularly interesting, they will spend 20 minutes talking to them. Their news is anything but generic.
And because they are beyond the stultifying grasp of the Broadcasting Complaints Commission (BCCSA) and the stuffy conservatism of the SABC, they can say exactly what they think however they choose to say it. This includes being able to say “fuck” when appropriate – exactly like millions of adults do around the world do on a daily basis. This makes for honest, compelling and surprising radio.
The final ingredient of disruption is leverage – a way to use the size of your opponents against them. Starting a new FM radio station is incredibly costly and time consuming. You need to obtain a broadcasting license from the regulator and secure spectrum in which to broadcast. The red tape alone can take months, if not years, to clear.
Then you need to build transmitters, or rent capacity from existing broadcasters. You need to build studios and rent offices. You need to employ hundreds, if not thousands of people to support all this infrastructure, to market your lineup, to sell advertising space, and the million other mundane tasks required by the market.
By starting an online station, Cliff Central avoids almost all of those up-front costs and delays. Thanks to the digital revolution, a studio now costs an order of magnitude less than it did just two decades ago. An enterprise-grade connection to the internet is not free, but it is tens, if not hundreds, of times cheaper than an FM broadcasting network.
Match made in heaven
And so Cliff Central can start his own station on the smell of an oil rag, with no corporate masters to answer to and no regulators breathing down his neck. Like a small judo master, he is able to topple the behemoth he used to work for in one smooth motion.
But none of this answers the most important, and most difficult question: how do you get listeners to change their behaviour? Here Cliff has made some smart deals. By partnering with WeChat, he has harnessed the marketing might of Naspers, which owns a large stake in WeChat.
Naspers itself is trying to disrupt another market – instant mobile messaging – which is currently ruled by WhatsApp. While Cliff needs a route to market, WeChat is desperate for differentiators like high quality unique content. From that perspective this deal is a match made in heaven.
Cliff has also talked MTN into offering uncapped access to his station for extremely low rates, starting at around R15 per month. While paying anything for radio may be unthinkable for many South Africans, R15 is an extremely low hurdle.
This is the inflection point in history – the point at which ordinary people go from accepting whatever dreck is broadcast at them by the mainstream media, to choosing what they really want to consume. And people are willing to pay for this privilege.
My wife and I don’t have DStv anymore. We get all of our entertainment over the internet, legally, via Netflix and iTunes. We can watch pretty much whatever we want, whenever we want. We pay a small premium for that ability, but it is more than worth it.
Paving the way
My wife has a mi-fi device that allows her to listen to iTunes radio in her car. At R37 per gigabyte of data, her bill never exceeds R100 per month. This allows her to listen to the music she loves without wading through the crap on local stations.
At the moment we’re the exception, but in four or five years we’ll be completely unremarkable. Already it’s unusual to find a middle class person in South Africa who doesn’t own a smartphone. In five years time, it will be unusual to find anyone in South Africa, except the very poorest of the poor, without a smartphone.
This explosion of access will drive the price of data relentlessly downwards, to the dismay of the networks but the delight of everyone else. This isn’t a guess or a wish – it has happened in virtually every developed country in the world.
The team at Cliff Central has sensed this opportunity, and has plunged headlong towards it. They are betting that the quality of their content and the strength of their reputations will get people over the relatively low hurdle of listening to radio via their phones. Like any bet, it has its risks. But the rewards will be larger and more satisfying than anything the SABC could ever have offered them.
It is tempting to call Cliff a “pioneer” but that description doesn’t really fit. Internet radio has been around the the better part of two decades. Instead, the team at Cliff Central are the first mainstream stars to start their own station.
This makes them part of the wave that follows the pioneers – the first permanent settlers with the skills and the capital to found a thriving town. Like any frontier town, there’s no guarantee that Cliff Central will survive, but they’re paving the way for others to join them. Saddle up, pard’ners.